What's Happening with Cryptocurrencies in Europe? Find Out Here!
Image generated with Ideogram and edited by me in Photoshop
Hello, Hive friends. Today, I want to tell you about what's going on in the world of cryptocurrencies in Europe, specifically in the region known as Central, Northern, and Western Europe (CNWE). Whether you're a crypto enthusiast or just trying to understand what's happening, keep reading!
Screenshot of the website Chainalysis and edited by me in Photoshop
CNWE: A Cryptocurrency Powerhouse
First of all, let me tell you that CNWE is the second-largest cryptocurrency economy in the world, just behind North America this year. Between July 2022 and June 2023, this region represented an impressive 17.6% of the global transaction volume and received approximately $1 trillion in blockchain value during that period.
Screenshot of the website Chainalysis and edited by me in Photoshop
The Reign of DeFi
So, what's catching everyone's attention in CNWE? It's decentralized finance (DeFi), which makes up 54.8% of the cryptocurrency value received in the region. And what is DeFi, you might ask? It's a way of using cryptocurrencies that doesn't rely on intermediaries like banks. DeFi has been a major driver of cryptocurrency adoption in CNWE in recent years, especially decentralized exchanges (DEX). And here's the interesting part.
Screenshot of the website Chainalysis and edited by me in Photoshop
Differences from One Year to Another
If we compare the money flows in both centralized exchange (CEX) and decentralized exchanges during the first six months of 2023 with the previous year, we see some interesting differences. Twenty-one countries in CNWE experienced reductions in money flows in both types of exchanges. But seven countries saw an increase in money flows to decentralized exchanges: Albania, Luxembourg, Latvia, Spain, the United Kingdom, France, and Lithuania. Note that Albania and Luxembourg, the two countries with the largest increases in DeFi activity, are smaller in terms of overall transaction volume, which allows them to grow more significantly in comparison.
Screenshot of the website Chainalysis and edited by me in Photoshop
The United Kingdom Leading the Way
Now, let's talk a bit about the United Kingdom, which is the largest country in terms of cryptocurrency economy in CNWE. It ranks 14th on our Global Cryptocurrency Adoption Index in terms of popular adoption. But here's the astonishing part: the UK is third in the world in terms of gross transaction volume, with an estimated $252.1 billion received in the past year.
Why So Much Crypto in the UK?
According to Jamie McNaught, founder and CEO of the UK-based crypto exchange Solidi, consumers in the UK are focused on cryptocurrencies from both a technological and investment perspective. People are seeking alternatives to poor savings and investment returns, from bolstering underperforming investment portfolios to investing in tokens or non-fungible tokens (NFTs).
McNaught also mentioned that institutional growth in the UK is not surprising, given the country's reliable and connected banking sector. But here's an interesting twist: recent UK regulation doesn't seem to have affected stablecoin activity. Despite the new Financial Services and Markets Act of 2023, some financial institutions view it as a positive step. Venture capital firm Andreessen Horowitz, for example, announced the opening of its first international office in the UK, praising its regulatory approach.
The Road Ahead
However, as McNaught points out, it might take some time before the cryptocurrency industry in the UK experiences a real impact from the new law. Uncertainty in the UK and the need to comply with regulations have led to the suspension of the purchase of certain cryptocurrencies by companies such as Luno and PayPal.
In summary, the cryptocurrency situation in Europe remains dynamic, with changing regulations and steady growth in DeFi. As the cryptocurrency space evolves, the opportunities and challenges are enormous. What does the future hold? Only time will tell.
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Original text created in Spanish and translated and formatted with Hive Translator by @noakmilo. Hardware used
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I would like to have the opportunity to compare this data not only in terms of volume but also in an average of the purchasing power and monetary capacity of different economies that are not as powerful as the European or North American ones. That would be interesting to get a more realistic idea of adoption, not just in terms of monetary volume. Excellent post as usual.
Thank you very much my friend. I was recently reading a study of the countries with the highest growth in adoption from 2020 to date, but I haven't been able to see any that compare based on purchasing value, it would be very interesting.